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Tokenization has long been a buzzword for crypto enthusiasts, who have been arguing for years that blockchain-based assets will change the underlying infrastructure of financial markets. The technology is seen as rapidly increasing in coming years, especially in the U.S., helped by the passage of three new bills. President Donald Trump’s administration has eased regulation of the broader cryptocurrency industry, paving the way for a boom in the valuation of companies in the sector and the rapid growth of crypto-related securities. However, the growth of the market for tokenized assets has been far slower than expected in recent years, with many projects still in their infancy or not yet live. How does tokenization work? The term “tokenization” is used in a variety of ways. But it generally refers to the process of turning financial assetssuch as bank deposits, stocks, bonds, funds, and even real estateinto crypto assets. This means creating a record on a digital ledger blockchain that represents the original asset. These blockchain-based assets, or “tokens,” can be held in crypto wallets and traded on the blockchain, just like cryptocurrencies. Where do stablecoins come in? Stablecoins can be seen as an example of tokenization. They are a type of cryptocurrency designed to maintain a constant value by being pegged to a real-world currency, typically the U.S. dollar. The issuer holds one U.S. dollar in reserve for every dollar-pegged crypto token it creates. Stablecoins are blockchain-based tokens acting as a proxy for an asset that already exists outside the blockchain. They allow people to move money across borders without interacting with the banking system. While critics say that this makes them useful for criminals who want to avoid banks’ anti-money-laundering checks, stablecoin issuers say that they are a lifeline for people in countries without a developed payments system. Are tokenized assets taking off? Yes and no. Stablecoins have grown in recent years, with the market estimated to be worth about $256 billion, according to crypto data provider CoinMarketCap, and expected to touch $2 trillion by 2028, according to Standard Chartered. But banks have talked for years about creating tokenized versions of other types of assetswhich they say will make trading more efficient, faster, and cheaperand those “tokens” have struggled to gain traction. While there have been individual issuances, there is not a liquid secondary market for these kinds of assets. One impediment to trading traditional assets via blockchain is that banks are working on their own private networks, making it difficult to trade across platforms. What are the pros of tokenization? Some proponents of the crypto industry have said tokenization can improve liquidity in the financial system. Illiquid assets like real estate could be traded more easily if they are broken up into small digital tokens. It is also expected to improve access to asset classes that are typically out of reach of smaller investors by creating a cheaper entry point. Which companies are interested in tokenization? Some major global banks, including Bank of America and Citi, have said they could explore launching tokenized assets, including stablecoins. Asset manager BlackRock is also doubling down on the tokenization boom, and has highlighted its ambition of becoming the largest cryptocurrency manager in the world by 2030. Coinbase, the largest U.S. crypto exchange, is seeking permission from the Securities and Exchange Commission to offer “tokenized equities” to its customers. How does new regulation help tokenization? Since stablecoins themselves are tokens and seen as one of the biggest drivers of the growth of tokenization, the new stablecoin law will end up boosting the proliferation of tokenization, experts say. The new market structure bill, known as the Clarity Act, is expected to establish a clear framework that could enable stablecoins and other crypto tokens to become more widely used. What are the risks? Some analysts say the hype around tokenization might be premature and caution that the rapidly growing crypto ecosystem could experience near-term turbulence due to the potential risks of a big decline in prices. European Central Bank President Christine Lagarde has warned that stablecoins pose risks for monetary policy and financial stability. Some critics of the industry warn that the frenzy around the new technology could introduce new systemic risks, especially in the absence of stringent regulation. They also say there is no reason why the blockchain should be any more efficient than the electronic ledgers and trading systems already used in financial markets. Buyers of third-party tokens, which are issued by unaffiliated third partiessuch as crypto exchange Krakenthat have custody of securities, could be exposed to counterparty risks, and regulators are sounding notes of caution. Earlier in July, Hester Peirce, a commissioner at the Securities and Exchange Commission who has frequently spoken positively about cryptocurrency, said tokenized securities would not be able to circumvent existing securities laws. More than half of the world’s U.S. dollar stablecoins are issued by a single company, Tether, which says it manages $160 billion in reserves, but has not undergone a financial audit. By Anirban Sen, Reuters Additional reporting by Chris Prentice and Elizabeth Howcroft.
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E-Commerce
If youre planning to roast smores over a campfire this summer, youll be spending more than last year on one ingredient that you cannot skip. Hershey plans to raise prices on its products to offset the cost of cocoa, a commodity thats been on a pricing roller coaster of its own over the last two years. CBS News reports that the company will introduce a low double-digit increase in prices across its products. Hershey owns many of the most popular candy brands in the U.S., including Reeses, Kit Kat, and York, as well as non-chocolate candies like Twizzlers and Jolly Rancher. The price hike will likely go into effect within 90 days, though that timeline may vary. Last year, the price of cocoa hit historical highs, soaring past $10,000 per metric ton. Cocoa prices began spiking at the beginning of 2024, doubling over the course of the year and tripling since late 2023. Over the last month, cocoa dipped well below its record highs, but it still costs more than twice as much as it did two years ago. Cocoa powder, used to make chocolate, comes from the seeds of the cacao tree, a water-intensive plant grown in tropical parts of Africa and South America. West Africa accounts for three-quarters of the worlds cocoa supply, with the Ivory Coast and Ghana being the worlds top two cocoa-exporting nations. With the global appetite for chocolate relying on a single region in Africa, cocoa is relatively vulnerable to forces outside of farmers controlparticularly climate-caused weather events that are worsening as the planet warms. The climate crisis is expected to cause accelerating agricultural losses for staple crops like corn and wheat around the globe, and cocoa is no different. Excessive rainfall in late 2023 caused cacao pods to rot, one factor that sent the price of the commodity sky-high. Intense heat is also taking its toll on cocoa farming, and cacao trees can struggle to produce pods when temperatures stretch above the plants ideal range for days on end. Less production means higher prices, though those effects might not have been fully felt by consumers right away. Pricing has yet to pick up meaningfully, but we expect this to accelerate potentially to the low teens in 2025, Celine Pannuti, head of J.P. Morgans European Staples and Beverages team, said in a late 2024 report on the cocoa crunch. We see the chocolate market set for inflation largely unprecedented in recent history. Chocolate in a changing economy Hershey says that its planned price increase isnt related to tariffs, but the company has identified tariffs as a threat to its business before. Cocoa cant be grown in the U.S. and must be imported, making it vulnerable not only to a changing climate but also to the whims of a president keen to inject chaos into global trade. In May, Hershey was pursuing an exemption with the Trump administration that would allow the company to import its key ingredient without taking on new costs associated with tariffs. In an earnings call, the company estimated that Trumps tariffs would cost it between $15 and $20 million in the second quarter of the year. Absent tariff relief, this expense is expected to increase in the third quarter as we work through inventory on hand, Hershey CFO Steve Voskuil said on the call. Given that Hersheys prices will increase, the company likely did not secure an exemption for its cocoa importsparticularly since any conversation with Trump would likely come with threats against raising prices. Fast Company has reached out to Hershey for an update on its pursuit of a tariff exemption for its cocoa imports. As a largely domestic food producer, we are relatively less exposed to tariffs than other industries, Hershey CEO Michele Buck said in May. That said, the current U.S. levy on cocoa is an exposure that we must manage on top of the cocoa markets unprecedented recent price swings. Cocoa might be more expensive now, but Hershey is optimistic about the future, noting in its last earnings call that cocoa supplies from the worlds top three suppliers should be up by 20%. The spike in cocoa prices also led to a flurry of cocoa farming investment, a move that could improve yields in the future. There are reasons to believe that this years crop marks the beginning of a multiyear growth cycle in cocoa supply, Buck said. In the meantime, global end users are now responding to persistently high prices in earnest, having waited and watched for some time.
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E-Commerce
Donut lovers, this one’s for you! Starting in August, you’ll be able to purchase limited-edition Crocs clogs inspired by Krispy Kreme’s glazed donutsand also get a free donut, just for wearing the Crocs into the store. The Krispy Kreme x Crocs Classic Clogs collaboration will be available for purchase on August 5 and come in a specially branded Krispy Kreme donut box. The shoes include two interchangeable toe caps of chocolate and strawberry icing with sprinkles, and oversized Krispy Kreme Jibbitz charms of the Original Glazed donut and Krispy Kreme “hot now” light, which customers can swap out depending on their tastes, as well as a strap around the heels with the Krispy Kreme logo. In addition, customers will also be able to purchase a five-pack of Krispy Kreme Jibbitz charms, with two donuts, a dozens box, the iconic paper hat, and the Krispy Kreme logo. “At Crocs, weve always believed in comfort you can customize, Terence Reilly, Crocs, Inc. Chief Brand Officer said in statement. Because when it comes to self-expression, we ‘doughnut’ hold back.” If all this Croc talk is making you hungry, take note: From August 4 to August 10, while supplies last, Krispy Kreme is also offering a special donut dozen featuring the three donuts featured on the Crocs: the Original Glazed, Chocolate Iced with Sprinkles, and Strawberry Iced with Sprinkles. You can find them at participating Krispy Kreme shops, and for pickup or delivery via Krispy Kremes app and website. How to get the Krispy Kreme x Crocs Classic Clogs On August 4a day before the collaboration officially dropsanyone can order the Crocs by visiting any participating Krispy Kreme shop and scanning the Crocs QR code on display. On August 5, the collaboration becomes available online at crocs.com and in Crocs stores. When to get a free donut for wearing Crocs to a Krispy Kreme store On August 9, Krispy Kreme will offer a free Original Glazed donut to customers who come in wearing their Crocs. Krispy Kreme as a new meme stock Krispy Kreme is currently riding the wave of another trend: the meme stock. In short (pun intended), this is when a group of investors use social media to decide which stocks to buy, often in struggling companies at a low price, forcing that stock price to rise. (The stocks are often heavily shorted, according to Reuters, forcing those investors to sell to stop their losses.) The practice has been popularized in part by the Reddit group WallStreetBets. On Wednesday, shares in Krispy Kreme (Nasdaq: DNUT) jumped 25% in premarket trading before the opening bell, before leveling off as of the time of this writing, up about 4%. This comes one day after the stock rose 26%. Krispy Kreme has a current market capitalization of $750.15 million. In its most recent earnings report for the first quarter of 2025, the company reported adjusted earnings-per-share (EPS) of -$0.05, which met Wall Street expectations. However, the company missed estimates on revenue, which fell 15.2% year-over-year to $375.18 million.
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